Jeff Bergstrom
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The World Federation of Exchanges' new paper, "Climate Risk Premium: Evidence from Commodity Options," finds that climate risks are positively priced into commodity options, meaning investors demand higher returns for holding assets exposed to climate-related risks. Using a novel methodology and proprietary data on "brown" and "green" iron ore options traded on the Singapore Exchange, the study documents that options tied to higher-emission ("brown") assets carry greater risk premiums than those linked to more sustainable ("green") assets, confirming the existence of a climate risk premium in commodity derivatives markets.
The research also reveals that climate policy uncertainty has a nonlinear effect on these premiums: moderate uncertainty increases climate risk premiums by unsettling market expectations, while extreme uncertainty causes traders and producers to adopt a "wait and see" approach, reducing premiums. These findings highlight the importance of transparent and predictable climate policies for stabilizing markets and demonstrate that climate-focused commodity options are valuable tools for managing exposure to climate risk, the WFE said.
The NYSE Exchanges would like to remind you that in observance of Memorial Day, the New York Stock Exchange, NYSE American Equities, NYSE Arca Equities, NYSE National, NYSE Texas, NYSE American Options, NYSE Arca Options, and NYSE Bonds markets will be closed on Monday, May 26, 2025. ~JJL
Lead Stories Oil Traders Double Down on Bets for 45% Rally in Coming Months
Alex Longley and Mia Gindis - Bloomberg
Oil traders are continuing to ramp up long-shot options bets that Brent crude can rally toward $95 a barrel over the coming months.
Call options at that strike price which expire in late July have traded more than 100,000 lots since the middle of April, with open interest growing by about the same amount. It's the equivalent of 100 million barrels, and another 5,000 contracts were bought Monday.
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Cross-Asset Volatilities Subside on De-Escalation of Trade Tensions
Ed Tom - Cboe
Cross-asset implied volatilities declined modestly last week as Thursday's US-UK trading framework announcement bolstered market sentiment ahead of this past weekend's fruitful Sino-American trade negotiations. Nonetheless, despite moderating for the 3rd successive week, implied volatilities across the major asset classes remain at elevated 80+ percentile levels, reflecting continued investor wariness with respect to recessionary pressures.
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BlackRock's Fink sees trillions of dollars idle as volatility persists
Reuters
BlackRock CEO (BLK.N) Larry Fink says tens of trillions of dollars of financial firepower is sitting idle in cash amid trade war worries and uncertainty over the United States economy, whose deficits are beginning to spook investors.
"There is 12 trillion euros sitting in bank accounts in Europe. In the United States, there's $11 trillion sitting in money markets funds. When there is uncertainty, you are going to keep more and more money in cash and that is what we witnessed," Fink told delegates at the Saudi-US Investment Forum in Riyadh on Tuesday.
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Policy Experts Fear Laxer Climate Rules Could Leave U.S. Markets Open to Greater Volatility; The Basel Committee's decision to take a voluntary approach to climate rules and focus only on extreme weather will weaken a key task force, advocates believe.
Aman Azhar - Inside Climate News
Experts and advocates reacted with concern and disappointment after the world's top financial regulators agreed on Monday to shift the climate focus of the Basel Committee on Banking Supervision toward voluntary disclosures and a narrower focus on extreme weather-a move seen as a step back from earlier momentum toward mandatory global standards. The Group of Central Bank Governors and Heads of Supervision (GHOS), which oversees the Basel Committee, endorsed the changes at its regular meeting in Basel, Switzerland.
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A top Fed official still sees a big economic hit coming from tariffs despite US-China talks
Filip De Mott - Business Insider
Fed Governor Adriana Kugler warned of tariff consequences even as US-China tensions ebbed.
Investors should still brace for higher inflation and slower growth, she said.
Markets are celebrating the rollback of US tariffs on China, but at least one Federal Reserve official still sees economic pain coming from the trade war.
In a speech on Monday, Fed Gov. Adriana Kugler said that the country won't escape a negative supply shock, given that current tariff rates are ultimately still much higher than they have been in recent decades.
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Exchanges GFO-X Launches Regulated Digital Asset Derivatives Trading Venue; First Institutional Trade Successfully Executed; The New UK Trading Venue Brings Institutional-Grade Market Infrastructure, Central Clearing, and Deep Liquidity to Digital Asset Derivatives
GFO-X
GFO-X today announced the successful launch of its UK FCA regulated trading venue for centrally cleared digital asset derivatives. The venue is designed to meet the increasing institutional demand for secure, transparent, and compliant digital asset futures and options. GFO-X brings together best-in-class market infrastructure, deep liquidity, and central clearing to solve for credit and significantly reduce counterparty risk.
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Singapore seeks to rival London and New York with new gold contract; Start-up backed by BlackRock and CBOE says structure of global bullion market 'dysfunctional'
Leslie Hook and Owen Walker - Financial Times
Singapore-based start-up Abaxx Exchange is seeking to challenge the dominance of London and New York in the global bullion market with the launch of a new physical gold contract, following a blistering price rally this year. The bourse, which has raised more than $100mn from investors including BlackRock and CBOE Global Markets, plans to offer a physical one kilo gold contract next month, denominated in US dollars and deliverable in Singapore.
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Robinhood Moves to Win Over More Active Traders, Expand International Business; The brokerage firm is adding new features for options traders as a way to enhance its platform.
Andrew Welsch - Barron's
Robinhood Markets is launching new features for options trading and it announced Tuesday plans to acquire Canadian digital asset company WonderFi. Both are in service to two of its goals this year: winning more business from active traders and expanding its international reach.
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Nodal Clear Announces Clearing Support for 24x7 Trading on Coinbase Derivatives Exchange
EEX Group
Nodal Clear announced that starting today it will offer clearing support for 24x7 (24 hours by 7 days) trading of select cryptocurrency futures contracts on Coinbase Derivatives Exchange (CDE). The new structure enables round-the-clock trading, for a subset of contracts including:
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SGX Group's April volumes powered by five-year-high stock market activity, record FX volumes amid global flight to quality
SGX
Singapore Exchange (SGX Group) today released its market statistics for April. In a month of tariff-driven volatility, global investors leaned on SGX Group's trusted and liquid marketplace to tap opportunities and risk-manage across asset classes, fueling multiple records. Securities daily average value (SDAV) rose 59% year-on-year (y-o-y) to S$1.9 billion - the highest since March 2020 - lifting total securities market turnover value to S$40.6 billion. Derivatives traded volume increased 24% y-o-y to 29.9 million contracts on record foreign exchange (FX) futures activity, as derivatives daily average volume (DAV) gained 24% y-o-y to 1.5 million contracts.
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Regulation & Enforcement CFTC Undermines Public Comment Process, Lets Coinbase Launch 24/7 Trading Without Review
Better Markets
Cantrell Dumas, Director of Derivatives Policy at Better Markets, issued the following statement in response to the Commodity Futures Trading Commission's (CFTC) failure to pause Coinbase Derivatives, LLC's launch of 24/7 futures trading: "It's deeply troubling that the CFTC allowed Coinbase to proceed with launching 24/7 futures trading while an active Request for Comment on this exact issue remains open. This premature action undermines the public comment process and signals that meaningful input from market participants, consumer advocates, and the public may be ignored when powerful financial firms are involved.
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***** Evidently, the CFTC heard all they needed to hear about 24/7 futures for Coinbase, and the answer would be yes, no matter what the comments said. ~JJL
Technology LCH DigitalAssetClear now live
LSEG
LSEG today announces that LCH SA has launched its new LCH DigitalAssetClear service. LCH DigitalAssetClear will provide market participants with access to the clearing of digital asset derivatives traded on GFO-X, the UK's first FCA-regulated, centrally-cleared multilateral trading facility (MTF) dedicated to digital asset futures and options. The launch of the service illustrates LCH SA's diversification into new asset classes and demonstrates the continued expansion of LSEG's post trade ecosystem. ABN AMRO Clearing Bank, Nomura International Plc and Standard Chartered Bank are the first clearing members offering clearing services to trading participants and market makers on LCH DigitalAssetClear.
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Trading Technologies' TT Strategy Studio Introduced Broadly to Meet Algorithmic Trading Needs of Sophisticated Professional Trading Firms, Hedge Funds; Comprehensive offering includes framework for developing, testing and deploying multi-asset automated trading strategies while protecting clients' IP
Trading Technologies
Trading Technologies International, Inc. (TT), a global capital markets technology platform services provider, today announced the broad introduction of its TT Strategy Studio multi-asset algorithmic trading offering for institutional trading firms, including the largest and most sophisticated professional trading organizations, quantitative firms, energy companies and hedge funds. The company made the announcement coinciding with TradeTech Europe 2025, the buy-side equity trading conference in Paris.
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Optiver relies on BMLL market data for quant strategy; The market-maker has built its trading business on top of BMLL's Level 3 data. But the collaboration is young, and the pair have grand plans to make options the next quant frontier.
Rebecca Natale - Waters Technology
When firms weigh whether to buy or build a product, market data-especially of the real-time variety-often falls automatically into the "buy" bucket. But historical data is a different beast, and the work often falls on firms' in-house teams to source such data from the various exchanges on which they transact. It is a large lift, and it's often not scalable due to each exchange's own quirks, says Edward Monrad, head of corporate strategy for Europe, the Middle East and Africa at Optiver.
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Strategy Citadel's Griffin Says Going to Cash May Have Been Best in Tariff Turmoil
Sonali Basak and Dasha Afanasieva - Bloomberg
As markets soared on a truce in the trade war between the US and China, Citadel founder Ken Griffin reflected on the past month, suggesting it would have been better to sit on the sidelines in cash.
"It's been a really difficult time for fundamental investors because so much of the value of the companies that we invest in is being dictated by very quickly changing policies from Washington," Griffin, 56, said in an interview late Monday for an upcoming series for Bloomberg Originals, Bullish.
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Opinion: Warren Buffett's worst money mistakes are actually a master class in how to invest wisely; 3 valuable lessons from some of Berkshire Hathaway's biggest blunders
Lawrence A. Cunningham - MarketWatch
In 1993, Warren Buffett made what he later called his worst deal ever: the acquisition of Dexter Shoe. At first glance, Dexter seemed to fit the Berkshire Hathaway mold - strong brand, loyal customers, thrifty culture. But it carried a fatal flaw: high-cost U.S. manufacturing competing with rising Chinese imports.
Buffett paid $443 million in Berkshire stock. Within a decade, Dexter was worthless. The real sting? By 2019, the stock he gave up was worth almost $8 billion. As Buffett later put it, he managed to turn "a good business into a bad investment" - and paid for it with gold.
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Volatility 'has returned to normal' but traders should buy on the dips, says SocGen
Jamie Chisholm - MarketWatch
News of an easing of U.S.-China trade tensions has not only added another leg up for the stock market but it's finally notably impacted an important indicator of market angst.
The Cboe Volatility index (VIX), an option-derived measure of expected S&P 500 volatility known as Wall Street's fear gauge, had remained stubbornly well above its long run average of 19.5, even as the market bounced quickly off its April 8 trough.
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